CNO Financial Group(US:CNO)2024-04-30 20:00Financial Data and Key Metrics Changes - The company reported operating earnings per share of $0.52, reflecting solid and sustainable earnings growth [39] - Book value per diluted share, excluding AOCI, increased by 10% to $34.97 [40] - Total net investment income rose by 2.5% year-over-year despite $24 million of unfavorable mark-to-market impacts on real estate partnerships [51][40] Business Line Data and Key Metrics Changes - The consumer division saw a 7% increase in life and health new annualized premium (NAP), with health NAP up 22% [41] - Long-term care NAP surged by 71%, driven by the success of the newly launched long-term care product [42] - Worksite division life and health insurance sales increased by 19%, with producing agent count up 28% [45][46] Market Data and Key Metrics Changes - Client assets in brokerage and advisory grew by 32% to a record $3.4 billion [44] - Annuity collected premiums increased by 6%, and account values rose by 4% [25] - Recruiting was up 12%, marking the seventh consecutive quarter of agent force gains [26] Company Strategy and Development Direction - The company is focused on sustainable profitable growth and shareholder return opportunities, maintaining all guidance ranges for the year [55][63] - A refreshed growth scorecard was introduced to enhance focus on production, distribution, and investments in capital [22] - The company is leveraging technology to improve agent effectiveness and efficiency in recruiting [26][98] Management's Comments on Operating Environment and Future Outlook - Management expects the full year operating EPS to be at the lower end of the range due to first-quarter results [34] - The company anticipates that alternative investments will generate returns more in line with long-term expectations of 9% to 10% for the remainder of the year [63][118] - Management remains optimistic about the Medicare product lines, driven by favorable demographics and strong demand [83][112] Other Important Information - The consolidated risk-based capital ratio was reported at 391%, with liquidity at $223 million [54] - The company deployed $40 million in share repurchases during the quarter, contributing to a 3% reduction in weighted average diluted shares outstanding year-over-year [30] Q&A Session Summary Question: What are the expectations regarding advertising costs in the current environment? - Management noted that advertising costs are expected to rise, particularly during election cycles, and they will adjust spending based on performance metrics [69][70] Question: Can you provide insights on long-term care margins and claims experience? - Management indicated that long-term care margins were generally in line with expectations, with favorable claims experience noted [72] Question: What are the trends in annuity surrenders? - Management acknowledged that surrenders are higher than in the past but remain stable and within expectations [84][87] Question: How does the company view the impact of new fiduciary rules? - Management does not expect significant adverse impacts from the new fiduciary rules, emphasizing their robust compliance program [78] Question: What are the drivers behind the strong growth in Medicare Advantage and Supplement products? - Management highlighted favorable demographics, strong execution by agents, and a unique combination of technology and personal service as key drivers [83][112]